Bloodbath as US stock market plunges

There’s a bloodbath happening on the US stock market amid concerning news out of China.

The US stock market is taking a hammering this morning as concerns about an economic slowdown and the impact of Donald Trump’s policies grow.

According to Bloomberg, some investors have been spooked by reports emerging that a Chinese team found a new bat coronavirus that could infect humans via same route as Covid-19.

The study — reported in the South China Morning Post — was led by Shi Zhengli – a leading virologist known as the “batwoman” due to her extensive research on bat coronaviruses – at the Guangzhou Laboratory along with researchers from the Guangzhou Academy of Sciences, Wuhan University and the Wuhan Institute of Virology.

Shi is best known for her work at the Wuhan institute, which has been at the centre of the controversy about the origins of Covid, with one theory suggesting it came from a lab leak in the city.

US President Donald Trump.

The index of the top 500 US companies finished massive 1.71 per cent down at the close of trading on Friday local time.

Analysts have also pointed to fears over President’s Trump’s trade war policies for the slump.

“The upbeat mood seen among US businesses at the start of the year has evaporated, replaced with a darkening picture of heightened uncertainty, stalling business activity and rising prices,” S&P Global’s Chris Williamson said.

Williamson also said: “A concern is the sharp, tariff-related, jump in manufacturing input prices, which will likely either put further upward pressure on inflation in the coming months or further squeeze profit margins among US companies.”

There have been heavy losses on Wall St. Picture: ANGELA WEISS / AFP

Analysts said lackluster US retail sales data and a tepid forecast from Walmart, raised questions about the outlook of the US economy as President Trump presses on with tariffs and government job cuts that could boost unemployment.

“You are starting to see some disappointment in the economic data,” said Tom Cahill of Ventura Wealth Management.

On Friday, an S&P Global reading on US services industry activity fell to a 25-month low, while a University of Michigan survey of consumer sentiment tumbled nearly 10 percent from January.

LBBW’s Karl Haeling said both are considered “secondary” economic reports, but they corroborate other major data points on employment and retail sales that have also pointed to weakness.

“Investors ever since the election have been very bullish,” he said, pointing to “all the uncertainty coming from Trump.” Of the 11 sectors in the S&P 500, only consumer staples finished in positive territory, while technology, industrials, energy and consumer discretionary lost about two percent or more.

A particularly big loser was UnitedHealth Group, which dropped 7.3 percent after the Wall Street Journal reported that the Justice Department is investigating allegations the company directed doctors to make patient diagnoses that would trigger higher government payments under the US Medicare Advantage program.

— more to come